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tonyt, In my analysis of the results of the 3 choices of owning either 1000 LGND, 1000 LGNDW, or 2000 LGNDW on margin, I stated that the analysis was dependent on the assumption of your numbers. However, we cannot assume those numbers are true at a price of zero on LGND. THerefore, I must correct my post to show that at a price of zero, one would lose {assuming again that your numbers are otherwise correct, other than the payment to LGND for the exercize of the warrants into stock} $12,475 had he bought 1000 LGND, $6,000 had he bought 1000 LGNDW, $12,245 had he bought 2,000 LGNDW on margin. Some observations can be immediately drawn from these numbers. The owner of LGNDW avoided $6,000 risk of loss at a cost of $ 650 from now until 6/3/00. His percentage gain on capitol invested was substantially greater had the stock moved up even reasonably. The owner of 2,000 LGNDW made out like a bandit if the stock did well , while risking less money if the stock closed at zero on 6/3/2000.He would have lost $12,245 whereas the holder of 1000 LGND would have lost $12,475 according to your figures. Bernie. If the stock is going to go up even reasonably, the warrant owner has higher percentage gains on invested capital and less capital risk if it goes to zero.. Bernie. |
